The rise in jeonse prices continues, resulting in a significant increase in cases where jeonse deposits are raised to renew existing contracts. Notably, the proportion of apartment jeonse renewal contracts has nearly doubled.
According to an analysis by real estate agency Ziptoss of the Ministry of Land, Infrastructure and Transport's monthly lease transaction data, 69% (47,852 cases) of the 68,932 nationwide jeonse renewal contracts in the first quarter of this year were classified as increased renewal contracts.
The number of increased renewal contracts increased by 41% compared to the previous quarter (33,903 cases) and by 73% compared to the same period last year (27,569 cases).
The total number of renewal contracts also rose by 11% to 68,932 cases compared to the same period last year (62,093 cases), indicating that more tenants are choosing to renew contracts even if it means raising the jeonse deposit.
By dwelling type, the number of increased renewal contracts for apartments has surged. The proportion of increased renewals among nationwide apartment renewal contracts was 37% in the third quarter of 2023, the lowest. Since then, increased renewals have steadily risen, reaching 75% in the first quarter of this year. The rate of 'reduced renewals,' where deposits are lowered for re-signing, plummeted from 46% during the same period to 4%.
Tenants are increasingly using the 'contract renewal claim right' that limits rent increases to 5% to alleviate the burden of living expenses due to rising jeonse prices. In the first quarter, the number of contracts utilizing this right was 42,362, a 38% increase from the previous quarter (30,688 cases). This represents a 47% increase compared to the same period last year (28,745 cases).
Jae-yoon Lee, the CEO of Ziptoss, noted, "As the shortage of jeonse listings and rising prices coincide, the burden on tenants is increasing not only for new contracts but also for renewal contracts. In particular, the rate of increased renewals in the apartment market is very high, suggesting that more people are opting to stay in their existing dwellings and raise their deposits instead of moving. "
He added, "As the instability in the jeonse market continues, it is highly likely that increases in increased renewals and claims for renewal rights will persist for the time being, and tenants need to pay closer attention to changes in contract conditions."